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Concerned about too much student housing, Boulder imposes moratorium on Uni Hill development

City Council approves emergency ordinance at special meeting

By Erica Meltzer, Camera Staff Writer

Posted:
07/29/2014 04:00:26 PM MDT

Updated:
07/29/2014 08:41:54 PM MDT

High-end student housing is, from an economic perspective, the "highest and best use" for land on University Hill, the use that makes a project profitable and gets the bank to sign off on the loan.

That is exactly why the city of Boulder needs a moratorium on new development on University Hill, City Council members said at an emergency meeting Tuesday.

Instead of allowing developers to add more student housing, the council wants to take a step back and find ways to move forward on concepts that would attract non-students — an "innovation district," perhaps — on the Hill.

The Boulder City Council unanimously approved an emergency ordinance Tuesday night that says the city will not accept any applications for building permits, concept plan reviews and site review requests that would add floor area in the University Hill business area. Building permits for repairs and internal renovations are not affected.

The moratorium is in effect retroactively to 5 p.m. Monday through 8 a.m. Aug. 20. The City Council plans to discuss a longer moratorium at its Aug. 19 meeting. The moratorium applies in the commercial district that runs roughly from University Avenue to College Avenue, from Broadway west to 13th Street, zoned "Business-Main Street."

Hill redevelopment

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Boulder is on the verge of significant investment on University Hill.

A short-term 0.3 percent sales tax that will go to the voters in November includes $3 million for lighting, tree-planting, irrigation and an "event street" on University Hill. The city plans to hire an expert in urban redevelopment to lead the creation of an "innovation district" or other special business district in the area to spur investment.

A key part of the city's strategy is encouraging more diverse business uses, especially those that draw older non-students to the area.

"If high-end student residential is the highest and best use, the economic drivers are such that we could see two, three, four big properties up there completely take the space that may be the uses that the community up there hopes will come about," Councilman Macon Cowles said. "It might be the most profitable use of the property, but it may not represent the highest and best use as far as the city of Boulder is concerned."

Zane Blackmer, who owns the property at 1111 Broadway, home of the Colorado Bookstore, told the City Council he started out wanting to redevelop the property as office and retail, but after a yearlong demographic and market study, he decided the office use was not viable.

"My conclusion was that there was a very limited market on the Hill for office," he said. "The only companies that had interest in being on the Hill were the young, hip, startup tech companies. While that is an existing market in Boulder, it is very limited."

Blackmer said many of those companies, funded by venture capital, have a life span of two to three years and would leave office space vacant in a short time period.

Blackmer said he had a pre-application meeting with city planning staff a few weeks ago on a project for the site that would include student housing.

David Driskell, executive director of Boulder's Community Planning and Sustainability department, confirmed that 1111 Broadway was one of several properties of concern to the city.

"If you look at the economics of student housing right now, the rents that are being charged, there is pretty much no other use that can compete," Driskell said.

Even though much of the area is zoned commercial, residential is an allowed use, in part because it is generally considered a less intense land use. That limits the city's ability to stop potential projects from including significant residential components targeted at student renters.

'Hit the pause button'

Driskell said the city wants to "hit the pause button" on development on University Hill and take another look at the allowed uses and the uses that would require special review. He said the city is likely to ask for at least a six-month moratorium at the August meeting.

"Students will always be a big part of the mix there," he said. "We have deep concerns that if it becomes predominantly student housing, it will be, for the rest of our time, a place completely oriented toward students."

Tuesday night's meeting was on the calendar as a study session, a type of meeting when council members discuss big-picture projects but don't make any final decisions.

A special session of the City Council at 6 p.m. to vote on the emergency ordinance was added to the city's website at 5 p.m. Monday.

The ordinance cites concerns about too much student housing being built on University Hill.

"The strong market for student housing may have an adverse impact on the city's desire to see a richer mix of uses in the University Hill business district. The University Hill business district is an area that is intended to attract a wider variety of daily users. An inappropriate mix of uses may undermine its function as one of the City's activity center nodes described in the Boulder Valley Comprehensive Plan," the ordinance language reads.

City spokesman Patrick von Keyserling said the ordinance was not in response to any specific project.

"The special ordinance is in response to a trend we've seen and provides an opportunity for the city to address it before we see a lot of projects come through," he said.

City Attorney Tom Carr said the ordinance needed to be done on an emergency basis because giving the normal notice would have allowed developers to get projects in before the deadline.

'It's extremely discouraging'

Developer Mike Boyers, who has been putting together plans and financing for a project that would provide public parking underneath a mixed-use development at 14th Street and College Avenue, expressed surprise and frustration at the emergency ordinance.

He said he was unaware of the vote, which could affect his plans, until a Daily Camera reporter called him.

Boyers said he backed off plans to include student housing in his project, even though that is what the market demands. Instead, he is going to develop housing that would be marketed toward university faculty and staff members. However, as long as the moratorium is in place, he can't move forward at all.

"I've been working like crazy to make that happen," he said. "In the near future, we were going to submit something. We backed off student housing because they are so adamant that they want different housing, housing for faculty and staff.

"It's extremely discouraging to me that they would pull this and do an emergency meeting with no notice."

Boyers told the City Council that he wants to be part of the solution, but his own survey of younger University of Colorado employees found that only 20 percent were willing to live on the Hill. The rents that would entice them to live there would be lower than those paid by the parents of out-of-state student renters.

The 14th and College project depends on the city agreeing to give Boyers a city-owned parking lot for $1. The city has signed a non-binding letter of intent to transfer the property to Boyers, but the city's ownership of a key parcel gives officials more leverage than it would for other projects.

Councilman George Karakehian said he did not like "the feel" of a moratorium, but the city had few alternatives right now, given the projects underway.

However, he said office use may not turn out to be viable on University Hill, and any moratorium should be short-lived.

"We need to have some light for these people," he said of developers. "We finally have some interest up there. We don't want to kill it."

Mayor Matt Appelbaum said between now and Aug. 19, the city needs to show a clear rationale for the moratorium and what the city hopes to accomplish.

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